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For the Record

Published on September 24, 2001.

BellSouth starts review for $200 million account

BellSouth Corp. has put its estimated $200 million advertising account into review, a spokesman for the company confirmed. News about a request for proposals letter for a telecom client first broke Sept. 17 on AdAge.com.

The request for proposals was issued to 29 agencies asking for assistance with strategic brand planning, creative development, media planning, general market and ethnic creative duties. The RFP also extends to electronic, Internet, database and direct response marketing, as well as strategic counsel, competitive tracking and analysis. Media buying is not part of the review spearheaded by Wanamaker Associates, Atlanta.

Omnicom Group's Merkley Newman Harty, New York, and WestWayne, Atlanta, the incumbent agencies, are among those that received the letter. Interpublic Group of Cos.' Initiative Media, Atlanta, handles the telco's media buying and planning.

William Pate, VP-advertising and public relations for Atlanta-based BellSouth, will lead the review. Agencies were required to complete questionnaires by Sept. 20. BellSouth will narrow the list of agencies, then begin a credentialing process. Meetings with agencies are not expected to take place until October. A decision is likely before year's end.

The $80 billion company serves nine Southeastern states with 25 million access lines and offers voice, data and broadband services. BellSouth owns 40% of Cingular Wireless; Omnicom's BBDO Worldwide, New York and Atlanta, handles Cingular advertising.

Ad Council breaks patriotic PSA effort

The Sept. 11 terrorist attacks prompted the Advertising Council to launch public service announcements itself for the first time since World War II. One spot featuring First Lady Laura Bush urging parents to talk to their children about the attacks and another urging unity and tolerance were produced last week and quickly delivered to broadcasters. Ad Council campaigns usually are produced for an organization, but these end only with the Ad Council logo.

Interpublic Group of Cos.' McCann-Erickson Worldwide, New York, filmed the spot with the First Lady at the White House. In the spot, Mrs. Bush tells parents to "talk with your children, listen to them. Tell they them are safe and loved." Omnicom Group's GSD&M, Austin, Texas, produced the unity and tolerance spot. Agency President Roy Spence said the campaign grew out of the long talk agency officials had when they got stuck in Annapolis, Md., by the airport shutdown and had to drive back toward Texas before eventually finding a flight. The campaign features Americans of different stripes saying, "I am an American." The ad ends with the phrase "e pluribus unum," which means, one out of many. Mr. Spence said he hoped the motto stimulates discussion of what America stands for. (See Landmarks, P. 74.)

Seneca in bid for Organic; Agency.com cuts staff

Organic, the San Francisco i-shop, said it received an offer to be acquired by Seneca Investments LLC, the e-services holding company established by Pegasus Partners and Omnicom Group earlier this year. The proposal calls for Seneca, which currently owns 22.2% of Organic, to acquire the shares it does not already own, or is not under contract to purchase, for 33 cents per share. Organic also said Seneca and the majority stockholder, Organic Holdings, entered into an agreement for Seneca to buy its 58.7% stake in the company. The terms of Seneca's purchase of the 58.7% involves an earn-out formula in which Organic Holdings would receive $5.9 million at closing and an additional payment of $10 million if certain conditions are met.

The acquisition of the remaining shares is subject to a number of conditions, including participation in the transaction of at least half of the shares in Organic that Seneca is not already in the process of buying, changes to the company's San Francisco office lease, which was negotiated to house a staff hundreds of people larger than what the company currently employs, and other conditions.

Earlier this year, Seneca made a bid for Agency.com, which also had a minority stake from Omnicom. That deal is also pending, and is expected to close in October. Agency.com announced a further restructuring of the company, including the layoff of 200 people, or 19% of its staff. The cuts include the closing of the Portland, Ore., office. Agency.com CEO Chan Suh noted that no New York employees were laid off. The i-shop has moved its headquarters, at least temporarily, because its 20 Exchange Place offices were located near the destroyed World Trade Center.

PR spending sees biggest decline in 8 years

Public relations spending plummeted in the first half of this year, suffering its greatest decline since 1993, according to the ninth annual Thomas L. Harris/Impulse Research Public Relations Client Survey. The survey revealed that average public relations budgets fell 29% to $2.3 million in 2001 vs. $3.1 million for the same period last year.

Spending on Internet communications fell sharply; spending also declined in media relations, internal communications and special events. Sectors devoting the greatest percentage of revenue to public relations are e-commerce (0.57%) and entertainment/sports (0.32%). Areas accounting for the highest budgets are energy ($4.7 million); transportation ($4.5 million); retailing ($4.2 million) and telecommunications ($4.2 million). The survey, a written questionnaire, included a cross-section of 3,452 public relations executives from all major industries, with a response rate of 44%. Thomas L. Harris & Co. is based in Highland Park, Ill.; Impulse Research Corp. is in Los Angeles.

Geier takes position at Lazard as senior adviser

Philip Geier Jr., chairman emeritus of Interpublic Group of Cos., joined New York-based investment bank Lazard as a senior adviser. In this part-time permanent position, Mr. Geier will concentrate on deals concerning consumer-focused businesses, and he will also consult on private and principal investments as well as capital markets. Until December 2000, Mr. Geier was Interpublic's chairman-CEO, a position he assumed in 1981. Over the years, he completed more than 150 acquisitions for the company. Mr. Geier said three investment banks approached him about possible employment. He chose Lazard because the firm is staffed "with idea-generating people, and it is also in the process of globalization, and is European in style and feel," he said. During his tenure with Interpublic, Mr. Geier lived overseas for a decade. As a senior adviser to Lazard, Mr. Geier will continue to consult with certain Interpublic clients in his position as chairman emeritus.

Mazda offers custom-color Miatas in online-only deal

Mazda North America Operations is offering 2002-model Miata sports cars in two custom colors in an online-only deal. The automaker sent e-mails to registered Miata owners alerting them of the offer, which will run through Oct. 15. A total of 600 Vivid Yellow and Laser Blue Miatas will be produced. Buyers can also order any available option. Customers must visit mazdausa.com. Mazda said no advertising is planned. Doner, Southfield, Mich., handles. Volkswagen of America used national TV and print to tout its online-only sales of special blue and yellow Beetles last year via Havas' Arnold Wordwide, Boston.

FYI

New York health-maintenance organization Atlantis Health Plan named DiMassimo Brand Advertising, New York, its agency of record. The $10 million to $15 million account was not in review. ... Scott Kurnit, who sold the About.com service he founded to Primedia late last year, stepped down as CEO of the special-interest site. William Day, who had been president-chief operating officer of the Primedia unit, will succeed him. Mr. Kurnit will continue as chairman through the end of the year and will act as an adviser to the unit through 2004. ... Network Associates, Santa Clara, Calif., marketer of McAfee anti-virus software and security products, began a search for a new agency for its estimated $10 million to $20 million advertising account. Its previous agency was Answer Think, Los Angeles. ... Internet search service AltaVista, which is majority-owned by CMGI, named James Barnett as CEO. The position had been unfilled. Mr. Barnett had been president at MyFamily.com. AltaVista also said it would also lay off 160 people as part of a consolidation of administrative and finance functions. ... 24/7 Media, New York, named Christopher Manning senior VP-of national media sales. Mr. Manning most recently worked for Gemstar-TV Guide, where he led the sales effort for the TV Guide Channel, TV Guide Online and TV Guide Interactive.